DHAKA–Within hours after Bangladesh Bank’s former governor Dr. Atiur Rahman resigned from his position on Tuesday, seven officials of the central bank were removed.


Besides assigning a new governor to the bank, Finance Minister Abul Maal Abdul Muhith hinted that more reforms are on the way for the central bank.

“Different systems of the Bangladesh Bank require reform” and the central bank “is not in healthy condition,” Muhith said.

He shared with the media that Fazle Kabir, who has been assigned as the new Bangladesh Bank governor, will take charge by March 20. Kabir is currently the chairman of state-owned Sonali Bank and is a former finance secretary.

After Rahman’s resignation on Tuesday, seven officials including deputy governors Abul Quasem and Nazneen Sultana of the Bangladesh Bank and banking division secretary M. Aslam Alam were fired from their positions.

Asia Times has learnt from sources within the central bank that there may be more reshuffles in the departments which were handling SWIFT financial transactions.

Muhith has been miffed at the Bangladesh Bank authorities as his ministry was not informed about the incident of hackers stealing $101 million of the Bangladesh Bank’s reserves from a US account in February. From the total amount, $81 million was wire-transferred to bank accounts in the Philippines and $20 million to Sri Lanka.

The amount dispatched to Sri Lanka has been retrieved. But the remaining $81 million is yet to find its way back to Bangladesh. Philippine Daily Inquirer broke the news around February-end and the Bangladesh Bank had waited till the first week of March to inform the Bangladesh government about the incident, forcing Muhith to call the central bank’s activities “very incompetent”.

The controversy eventually forced Rahman to resign. Prime Minister Sheikh Hasina called Rahman’s move “a bold decision”. “It will remain a rare example of moral strength and courage,” she said.


Internal investigations within the Bangladesh Bank found that the hackers installed malware into the Bangladesh Bank systems around January this year. These malware helped the hackers gain knowledge about the transaction methods of the Bangladesh central bank.

It was also found that the hackers had used the same malware to “destroy evidence”.

The hackers had opened four bank accounts with Rizal Commercial Banking Corporation (RCBC) in Philippines back in May of 2015. The amount of $81 million was transferred to the RCBC accounts on February 4.

Initially, it was claimed by central bank investigators that Chinese hacker groups may have been involved. But this theory was not followed up later although details emerged in the Philippines on Tuesday that $30 million of the money was delivered in cash to a Chinese casino junket operator in Manila.

A four-member inquiry committee headed by former Bangladesh Bank governor Mohammed Farashuddin was assigned to investigate the incident.

On Tuesday afternoon, a joint director of the Bangladesh Bank finally filed a criminal case under Money Laundering Prevention Act accusing unknown persons, with the Motijheel Police station.

The case, filed 40 days after the crime had occurred, was transferred to police’s Criminal Investigation Department (CID) on the same day. On Wednesday, a Dhaka court fixed April 19 as the day when the police investigation report should be filed.

Financial experts in Dhaka are hopeful that a police investigation, besides the internal investigation of the central bank, may prove beneficial for finding out local perpetrators if any.

Dr. Zaid Bakht, chairman of state-owned Agrani Bank and a former research director of Bangladesh Institute of Development Studies, said to Asia Times that the filing of the criminal case “was very necessary in terms of legal procedures.”

He explained that the main four-member inquiry committee will be looking into the technical details and internal issues. “The criminal intent will be investigated by the CID,” he said.

On the question about whether the $81 million will ever find its way back to Bangladesh Bank, Bakht said, “This is not going to be a challenge if the Philippines government cooperates with their Bangladeshi counterparts.”

It was reported by the international media that the four accounts opened with the RCBC bank had fake information. Also, the closed-circuit television cameras of Jupiter Street branch of RCBC were not functioning on February 9 when most of the funds were withdrawn from the accounts.

Although a stop payment request from the Bangladesh Bank on the funds was received by RCBC on February 8, it was revealed during a senate hearing in Philippines in March.

Alluding to these incidents, Bakht said, “It can be understood that there was a lack of due diligence from the Philippines end about the information in the accounts to where money was transferred. The money can still be traced if Manila cooperates.”

‘Wake-up call’

Earlier this week, while talking to Bloomberg television, Sri Lankan central bank governor Arjuna Mahendran said, “It’s a wake-up call to everyone. My counterpart in Bangladesh is devastated by what happened. Vigilance is necessary, our systems need to be constantly scrutinized. Digitization makes the systems vulnerable.”

Similar points were stressed by businessmen in Bangladesh.

Mohammad Helal Uddin, a former vice-president of the Federation of Bangladesh Chambers of Commerce and Industry, said to Asia Times: “Over the last few years, time and again it was said by the [Bangladesh] government and some private and public organizations that we have drastically improved in cyber security. This incident should drive us to improve cyber security in all business and financial sectors of our country.”

Syed Tashfin Chowdhury is a Dhaka-based freelance journalist and editor of  Xtra, the weekend magazine of New Age, a leading English daily in Bangladesh.

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